In this Vietwheels article, we discuss how to overcome obstacles and changing trends from market dynamics and declining car sales in Vietnam during 2023. With Vietnam’s car sales falling 47% in April and 52% in May of 2023, the local auto market saw a significant downturn in the early months of the year. Both domestically and imported vehicles were impacted by this reduction, which led automakers to take aggressive measures.
Reviving the Market with Discounts and Incentives
In order to revitalize the market, major manufacturers such as Toyota, Hyundai, Honda, Mitsubishi, Mazda, KIA, and Nissan unveiled several incentives in May 2023. Car buyers were able to save a lot of money thanks to these incentives, which included free accessory sets, insurance packages, registration fee reductions, and zero-interest loans for the first six months.
Intervention of the Government
In an effort to support the domestic auto sector, the Vietnamese government issued Decree 41/2023/NĐ-CP, which reduced registration rates for cars made moreover assembled domestically by 50%. Notwithstanding these initiatives, the industry was hampered by many cars on the market and high interest rates for borrowers.
The Resilience of Automotive Companies in Vietnam
In 2023, Vietnamese automakers introduced around 40 new models, maintaining their product lines in spite of market difficulties. With best-selling models like the Mazda CX-5 and Toyota Vios enjoying registration cost reductions, the emphasis was mostly on mid-range urban cars in the B and C segments.
Market Performance: Electric Vehicles and Car Sales in Vietnam
263,251 cars were sold in the first 11 months of 2023, a 28.72% drop from the same period the year before. Notably, sales of electric vehicles increased by 5% in the third quarter, primarily due to VinFast's new models.
SUVs Are Taking the Lead Over Sedans in Changing Preferences
In November 2023, sales of SUVs overtook sedans for the first time, making them the most popular car model in Vietnam. This shift indicates a substantial shift in the Vietnamese auto industry and reflects changing consumer tastes, especially among the younger generation.
Customer Preferences: SUVs and B-Class Sedans
Customers are favouring smaller automobiles in the B-class sedan market, such as the Hyundai Accent, Honda City, and Toyota Vios, as a result of economic hardships. B-class SUVs like the Kia Seltos, Toyota Corolla Cross, and Hyundai Creta also became more well-liked.
Electric Cars and Shifting Regulations
Due to favourable laws on Vietnam's Special Consumption Tax (SCT) for electric vehicles and changing consumer preferences, VinFast's electric SUVs, the VF E34 and VF 8, acquired popularity. In April and May of 2023, these models achieved top-selling positions.
Interest of Chinese Manufacturers
Leading Chinese automakers expressed interest in Vietnam's growing automotive industry in 2022. By the end of 2022 and the beginning of 2023, several Chinese car models had been released in Vietnam, despite caution stemming from previous experiences. This suggests a strategic approach to the Vietnamese market.
We hope that this Vietwheels blog about car sales in Vietnam was insightful. Please visit our News and Articles page to read more blogs about reviews and car sales in Vietnam We at Vietwheels wish you the very best and hope you find you dream car in Vietnam soon!
